Found 22 article(s) for author 'Joseph Aldy'

Birds of a Feather: Estimating the Value of Statistical Life from Dual-Earner Families

Birds of a Feather: Estimating the Value of Statistical Life from Dual-Earner Families. Joseph Aldy, March 2019, Paper, “Economists have long employed hedonic wage analysis to estimate income-fatality risk trade-offs, but some scholars have raised concerns about systematic measurement error and omitted variable bias in the empirical applications of this model. Recent studies have employed panel methods to remove time-invariant individual-specific characteristics that could induce bias in estimation. In an analogous manner, this paper proposes to exploit assortative matching on risk attitudes within married couples to control for worker characteristics that are unobserved to the econometrician. I develop and implement a modified hedonic wage estimator based on a within-coupled differenced wage equation for full-time working married couples with the Current Population Survey Merged Outgoing Rotation Group over 1996-2002. The key assumption builds on the findings in the assortative matching literature that individuals often marry those who have common traits across many dimensions, including those that may influence worker wages and are correlated with observed occupational fatality risks.Link

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What Green New Deal advocates can learn from the 2009 economic stimulus act

What Green New Deal advocates can learn from the 2009 economic stimulus act. Joseph Aldy, February 15, 2019, Opinion, “Congressional Democrats have introduced a “Green New Deal” proposal that calls for a 10-year national mobilization to curb climate change by shifting the U.S. economy away from fossil fuels. Many progressives support this idea, while skeptics argue that a decade is not long enough to remake our nation’s energy system.Link

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The Economic Implications of a Low-Carbon Future

The Economic Implications of a Low-Carbon Future. Joseph Aldy, January 2019, Paper, “What are the costs and benefits of reducing the carbon intensity of the U.S. economy? The economic costs of decarbonization reflect the stringency of climate policy goals—how ambitious is the objective and how quickly must the economy meet it—and the responsiveness of investment and consumption to new policies and associated price signals. The more low-cost opportunities for switching to lower- and zero-carbon energy sources and the more options for energy efficiency and conservation, the lower the cost of any decarbonization goal. The costs will also reflect a number of critical policy design choices that will affect the cost-effectiveness of reducing carbon emissions, the creation and use of economic value (such as carbon tax revenues) that could promote economic growth, and the potential for innovation policy to complement emission mitigation policy.Link

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Evaluating the performance of regulations and regulatory institutions

Evaluating the performance of regulations and regulatory institutions. Joseph Aldy, 2018, Book Chapter, “If markets function well in allocating resources, then government regulation is unnecessary. Indeed, government intervention in well-functioning markets will likely  make society worse off by imposing costs that exceed their benefits. If markets do not…Link

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Trade Shifts Pollution More than Regs Shift Trade

Trade Shifts Pollution More than Regs Shift Trade. Joseph Aldy, September/October 2018, Paper, “Burning coal to power manufacturing
contributes to premature mortality in the United States and in developing countries alike. Despite stringent environmental regulations, U.S. coal-fired power plants still cause tens of thousands of early deaths each year. Any factor that causes manufacturing activity to shift from the United States to other countries can also shift the demand for coal-fired power — and its pollution — to these other countries.Link

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Learning from Nationally Determined Contributions

Learning from Nationally Determined Contributions. Joseph Aldy, April 2018, Paper, “National governments have submitted emissions mitigation pledges under the Paris Agreement that vary considerably in form, level of required emissions mitigation, elaboration of nonemissions goals, and implementation strategies. As a result, domestic emissions mitigation programs necessary to deliver on the Paris pledges will diverge in the degree to which that mitigation will be achieved at least cost. This paper explores both what we learn from how nationally determined contributions (NDCs) diverge from least-cost policies and the implications for comparing mitigation efforts.Link

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The Efficiency Consequences of Heterogeneous Behavioral Responses to Energy Fiscal Policies

The Efficiency Consequences of Heterogeneous Behavioral Responses to Energy Fiscal Policies. Joseph Aldy, December 2017, Paper, “The behavioral responses to taxes and subsidies are often subject to various behavioral biases and transaction costs—what we define as “microfrictions.” We develop a theoretical framework to show how these microfrictions—and their heterogeneity across the population and policy instruments—affect the design of Pigouvian policies. Standard Pigouvian pricing still holds with transaction costs, but requires adjustment with behavioral biases. We use transaction-level data from the US appliance market to estimate the heterogeneous behavioral responses to an array of energy fiscal policies and to quantify microfrictions. We then assess optimal fiscal policies and find that it is rarely optimal to couple a Pigouvian tax on energy with an investment subsidy in this context. We also find that energy labels—intended to increase the salience of energy information—can interact in perverse ways with both taxes and subsidies.Link

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The Political Economy of Carbon Pricing Policy Design

The Political Economy of Carbon Pricing Policy Design. Joseph Aldy, October 2017, Paper, “The goal of the Harvard Project on Climate Agreements, which was established in 2007, is to identify and advance scientifically sound, economically sensible, and politically pragmatic public policy options for addressing global climate change. Drawing upon leading thinkers from around the world, the Project conducts research on policy architecture, key design elements, and institutional dimensions of international and domestic climate-change policy. The Project is directed by Robert N. Stavins, A. J. Meyer Professor of Energy and Economic Development, Harvard Kennedy School. For more information, see the Project’s website…Link

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Energy Market Shock Absorbers: Waiving Environmental Regulations in Response to Fuel Market Disruptions

Energy Market Shock Absorbers: Waiving Environmental Regulations in Response to Fuel Market Disruptions. Joseph Aldy, March 23, 2017, Paper, “As a result, such volatility can have important political implications. Energy price volatility has historically reflected geopolitical events around the world. But recently in the United States, natural disasters, policy design and implementation, and competition in markets have contributed to volatility in U.S. energy price.Link

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Regulations have costs, benefits

Regulations have costs, benefits. Joseph Aldy, February 16, 2017, Opinion, “President Trump jettisoned more than 30 years of bipartisan regulatory policy on January 30 when he issued an executive order on “Reducing Regulation and Controlling Regulatory Costs.” The order requires that whenever a new regulation is enacted by any federal agency, regulators must eliminate two rules so that the cost of complying with the new rule is offset by the costs associated with the two existing rules. But Trump misses a crucial point about government regulations: They impose costs on society, but they also produce benefits.Link

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